That's the really interesting bit--it isn't. Most of your points are mostly correct. But that doesn't stop its being popular.
This shouldn't surprise people either; sitcoms, junk food and package tours are also very popular. More generally, quality is very rarely positively and consistently correlated with popularity. And yet, in the sphere of programming languages and operating systems, it seems people assume that it does correlate.
Please don't base your choice of technology exclusively off what most people use.
If anything, it was more popular; in 2001, Java was the "modern" mainstream choice for backend in financials and enterprise L.O.B. applications, where today it's simply the incumbent choice. People forget that Rails was a primarily a reaction to J2EE's hegemony over "professional" (to use the closest word I can think of to describe the concept) web backend development.
A significant fraction of our enterprise clients today are entertaining a new "modern" platform to supplant Java, like Clojure (in finance) or Scala (in startups). Maybe it's not occurring to people that Clojure, Scala, and even Groovy weren't options in 2001. It was Java, C#, or PHP, or Perl, or C/C++.
This shouldn't surprise people either; sitcoms, junk food and package tours are also very popular. More generally, quality is very rarely positively and consistently correlated with popularity. And yet, in the sphere of programming languages and operating systems, it seems people assume that it does correlate.
Please don't base your choice of technology exclusively off what most people use.